Hello Magic,
The Webhosting market is highly saturated at the moment. New startups/ resellers etc. They all offer such things as unlimited space and bandwidth which we know isnt available.
The hardest thing is making a name for yourself. People are reluctant to go with new webhosting companies, like ours because they do not know much about them.
Support is another major issue. The Webhosting market means that you have customers worlwide, often in different timezones, but you are still required to provide 24 hour tech support. We have three people currently working on tech support. Two run during Australian business hours, and one takes the night shift, we are looking into expanding into two on night shift.
To start a webhosting company is not easy. You dont really expect to make a profit within the first 3 months. It is a costly excercise, banking/merchant accounts etc.
Robert